Description
Abstract: We ask whether a weaker contribution of information and communication technologies (ICT) to productivity growth could account for the productivity slowdown observed in Canada since the early 2000s. To answer this question, we consider several models which capture channels by which ICT could affect productivity growth. Our results indicate that ICT continues to contribute to productivity growth, but that this contribution has declined and consequently accounts for part of the productivity growth slowdown. However, the productivity slowdown and the change in the contribution of ICT do not seem to have the same timing. While productivity growth slowed in the early 2000s, the ICT contribution does not appear to have fallen until around the Great Recession. This prompts the conclusion that while ICT had little to no role in the initial productivity slowdown, it has been a major determinant of the subdued productivity growth since 2007-2009.